Understanding how to properly price your services is crucial to the success of any business. In the world of drone LiDAR surveying, two popular methods dominate: cost-based pricing and value-based pricing. But which is the right one for your business, and how do you implement it effectively? Let's delve into it!
Cost-Based Pricing Vs. Value-Based Pricing
First, it's important to understand the difference between these two methods. Cost-based pricing involves calculating the cost of each aspect of a job – materials, labor hours, and other expenses – and then adding a profit margin. This approach is straightforward but can leave money on the table, especially in a high-value industry like drone LiDAR surveying.
Value-based pricing, on the other hand, bases the price on the perceived value of the service to the client. It’s about selling the outcomes and benefits, not just the raw service. In an industry as dynamic and high-tech as drone LiDAR, value-based pricing can more accurately capture the worth of the service being provided, leading to potentially higher profits.
So, how can you switch to value-based pricing for your drone LiDAR business? Let’s break it down.
Determining the Value of Your Drone LiDAR Service
In a nutshell, the value you provide to your clients comes down to four key areas:
Access to Difficult Areas
Let’s consider the ROCK R3 PRO LiDAR camera for drones as an example. This advanced piece of technology can capture over 1,000 acres per day, compared to the 5 acres a traditional 2-man survey crew can cover. This staggering increase in productivity equates to significant time savings for surveying firms.
Moreover, the accuracy of the ROCK R3 PRO is superior to traditional methods. Where a survey crew might take measurements every 25 feet, the ROCK R3 PRO captures over 300 points per square meter with an accuracy of 1-3 cm.
In terms of safety, using a drone-mounted LiDAR like the ROCK R3 PRO allows surveyors to avoid hazardous areas and wildlife.
Finally, drone LiDAR has the ability to access difficult, sometimes inaccessible, terrain. The ROCK R3 PRO can fly above dense vegetation and still generate a precise topographic surface using ROCK Cloud.
To price your service, you need to evaluate how much these benefits are worth to your clients. For example, how much time and money can they save by using your service? How much is the increased safety worth to them? These are the factors that should guide your pricing.
Discovering Your Pricing
While setting value-based pricing, the next big challenge is to discover the right price that captures the true worth of your services. Here are some practical ways to do so:
Reach Out to Local Survey Firms: A straightforward way to gauge the value of your services is by directly contacting local survey firms. They can provide insights into how much they're willing to pay for the benefits that your service offers.
Engage in Industry Groups: There are online communities where professionals in your industry exchange information. For example, the Drone Mapping and Surveying Group on Facebook is a hub for experts to discuss industry trends, technologies, and pricing strategies. By participating in these discussions, you can get an idea of what companies are currently charging for similar services.
Estimate the Cost of Traditional Methods: Another method of discovering your price point is by comparing it to the cost of traditional surveying methods. This can give you a baseline for setting your price.
For instance, let's look at the cost of surveying a 300-acre area using traditional methods. It would take a 2-man crew approximately 30 days to complete the survey, considering they can cover 5-10 acres per day. If they are paid an hourly salary of $20, that equates to 30 days x 2 crew members x 8 hours/day x $20/hour = $9,600.
In addition to field work, there is also desk time required to process the data. Let's say it takes one person three days at $45 per hour to process the data. That's an additional 3 days x 8 hours/day x $45/hour = $1,080.
Add to this the transportation costs, equipment costs, and other overheads, and the total cost of the project can easily reach $15,000 to $25,000. Remember, this is the cost to the firm, not what they are charging their clients.
Given this, if your drone LiDAR services can accomplish the same task in less time, with better accuracy and safer conditions, you can see how the value you provide can justify a premium price. This approach not only ensures that your prices cover your costs, but also allows you to capture the full value of your service.
By effectively communicating this value to your clients, and showing how your services can save them time, money, and mitigate risks, you will be well on your way to setting a profitable, value-based price for your drone LiDAR services.
Communicating Your Value to Clients
Once you've established your value-based pricing, it's essential to communicate that value effectively to your clients. Focus on the benefits they'll receive from your services – the time savings, the increased accuracy, the improved safety, and the ability to access difficult areas.
Showcase your technology and its capabilities. Using advanced tools like the ROCK R3 PRO and the ROCK Cloud platform for LiDAR data processing not only demonstrates your commitment to cutting-edge technology, but also the tangible benefits your clients can expect.
Incorporate case studies or examples that demonstrate these benefits in real-world scenarios. For instance, you could point to instances where drone LiDAR surveying helped surveying firms save time and money, or highlight a project where your services were instrumental in safely accessing hazardous terrain. Consider adding such stories to your blog or including them in your project proposals.
Embarking on the journey of value-based pricing for your drone LiDAR business can be a transformative process. Not only can it increase your profits, but it also allows you to articulate the value you deliver to your clients more effectively.
Discovering the right price can be a challenge, but by leveraging resources like local survey firms, online communities such as the Drone Mapping and Surveying Group on Facebook, and comparing costs to traditional methods, you can better understand and set your price.
To learn more about drone LiDAR surveying, explore our ROCK Blog, or check out our ROCK Community page for answers to your pressing questions. To see the ROCK R3 PRO in action, be sure to visit our YouTube channel, Indiana Drones, where you can find plenty of useful tutorials and impressive demonstrations.
We at ROCK Robotic are excited to partner with you on your journey into value-based pricing. Together, we can push the boundaries of drone LiDAR surveying, offering superior value to clients and shaping the future of the industry.
Remember, at the end of the day, your goal is to provide your clients with the best possible service while recognizing the value of your hard work. Let us help you elevate your business to new heights. Ready to get started? Schedule a meeting with our team today to learn more!